Refinance
My Car

Refinancing could be the right solution for you!  

When you refinance your car with us, you could:  

• Split your PCP balloon payment into affordable monthly payments 
• Find a new deal with a better rate of interest – and potentially save £1000s  
• Switch to an agreement with a longer loan term and lower monthly repayments  
• Get a loan that better suits your current financial situation 

Car refinancing is the term used when taking out a new finance agreement – usually with a new lender – to pay the balance on an existing car finance loan.

When you refinance, you’ll settle your current finance with a one-off payment. Depending on the deal, this payment could be covered by the new lender or incorporated into your new loan amount.

Why do people want to refinance? It’s all about adapting to your current circumstances. When you take out a hire purchase (HP) or personal contract purchase (PCP) deal, you’ll commit to making monthly repayments for a set time. It could be two, three, or even seven years! But over time, things can change, and a loan that was right for you when you signed the deal, isn’t right anymore.

Maybe your credit score has improved, and you could get a better interest rate? Or your expenses have increased, and you’d like a lower monthly repayment? You could have taken out joint finance but now need a loan that’s just in your name or have reached the end of your PCP agreement and need finance to cover the balloon payment?

Refinancing could help!

Here at CarFinance 247, we work with a panel of lenders and some of them can offer refinance loans. And we’ll always look to find you the best deal from our panel, whether you have an existing agreement in place or not.

Wondering whether a refinancing loan is right for you? If your circumstances have changed, it could be a great solution.

One benefit of refinancing could be that you find a car loan with lower monthly repayments. If you’re struggling to make your repayments or need more disposable income, there’s no need to wait until the end of your agreement. You could swap to a loan with cheaper monthly repayments and a longer repayment period instead.

Looking for a better deal? Credit scores aren’t fixed and yours might have improved since you took out your finance. In fact, if you’ve kept up with your repayments, your existing loan could have boosted your rating! Refinancing could mean you find a loan with a lower rate of interest, lowering your monthly repayments or reducing the total amount payable.

It's also an option for people coming to the end of a PCP agreement. To keep the car, you’ll need to pay the balloon payment. Taking out a loan to split this one-off cost into manageable monthly repayments could mean you can keep a car you’d otherwise have to hand back to the lender. 

But there are things you need to keep in mind when considering refinancing. Switching to lower repayments might not be good value long-term. Make sure you take note of the total amount payable on the loan. If you’ve chosen lower monthly payments but a longer loan term, then you could end up paying back more overall.

When you come to the end of a PCP agreement, you have options. You can hand the car back, use any positive equity as a deposit for a new agreement, or pay the balloon payment to own it. The balloon payment is usually a lump sum that represents the current value of your car. It can be a substantial sum. And a balloon payment of thousands of pounds can be tough to pay off in one go.

That’s where refinancing comes in. You can take out a new loan to break this one-off cost down into more manageable monthly repayments.

But don’t forget, taking out a loan to cover your balloon payment will mean paying interest and so you’ll likely end up paying more to buy your car than you would’ve done if you’d paid the balloon in one go.

Thanks to our panel of lenders, we can look to help people with a variety of different circumstances to refinance. Just because your credit rating could do with some work, it doesn’t mean you have to give up on the idea of getting a new deal.

The same applies if you’re in negative equity. This happens when your car has depreciated (lost value) more quickly than expected and you owe more on the loan than the car is worth. You can still find finance when you’re in negative equity, but your new loan will be based on the amount you have left to pay rather than the car’s new worth. This could limit the number of lenders available to you and may affect the interest rate you’re offered. 

Whether you’re looking to get a better deal, to reduce your monthly repayments or finance a balloon payment, we could help!

It all starts with a quote. If you’re approved in principle, your dedicated account manager will give you a call to talk through your options. No strings attached. They can answer any questions you have about your existing loan and how your refinance deal will work.